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The Valley Alliance of Worker Co-operatives: Exploring the Potential of Co-op Led Development

Preface, 2013

Adam Trott

Erbin Crowell

(Editor’s Note: The Valley Aliance of Worker Co-ops (VAWC) received the 2013 Eastern Conference for Workplace Democracy's Award for Co-operative Advocacy and Development. The award specified not only VAWC’s commitment to co-op led development, but their numerous successful worker co-op conversions, the many presentations of their model of development, and the high level of their co-op leadership in the movement. Its work is based on a well-thought out development plan based on adapting structures and strategies used by Mondragon and in Northern Italy to advance the development of worker co-ops in the US. Please see the recent map of the locations of all the members of VAWC.)

Reports such as this often exist in isolation from their subjects and are allowed to languish separate from their intended goals. Rarely to we stop to look back and consider them in the light of later events. Were our assumptions correct? Was the vision laid out compelling and relevant? Have we been able to accomplish any of what we hoped? With its particular closeness to VAWC – this report is part of the VAWC Owners’ Manual given to every member Co-op - we thought it would be useful to provide a preface to as an update and reflection on VAWC’s progress over the last few years.

This report serves as a strategic reminder to the Member Co-ops of VAWC of what it was and why we set out to accomplish together. For those interested in our model it serves as an introduction to the context of our work and the basis of our approach to collaboration and business development. From the outside, it may appear that VAWC’s progress is a fluke or happenstance. This report communicates the analysis undertaken, the planning and collaboration that went into establishing a different path for co-operative development in our region. It describes the international and regional context VAWC co-ops are working in regarding research and structures. At the time co-ops leading an organizing effort to formulate a development staff directed by co-ops was a foreign concept. For most it was something that few understood or valued. For VAWC Member Co-ops it contextualizes the effort worker co-ops are making in western Massachusetts and southern Vermont to participate in education, development, financing and marketing to create a rich, diverse co-operative economy.

Among the questions we were attempting to address: How can worker co-ops pool resources to meet their own goals for the long and short term? What was the process of co-ops coming together to form a secondary co-op? Did we have the critical mass to ensure staff and organizational capacity to reach our shared goals? Why did this cluster of co-ops feel they had to step up into development and mutual support for business success? What were the key ingredients required for us to have the capacity to mobilize efforts for education, development, and self-directed co-op activity?

It is worth mentioning the feedback we received when we first started reaching out to co-ops in our region to begin formalizing our co-op of co-ops. Those visited during the 'VAWC Road Show' were near unanimous in supporting the effort to have co-ops lead and fund such an organization as a venue for co-operators to communicate needs and goals. Members wanted to form an equally inhabited place to chart a vision for the future. Feedback from our closest partners – the United States Federation of Worker Co-ops, the Co-operative Fund of New England and Grassroots Economic Organizing – were positive. Yet outside of these collaborators responses were more pessimistic: “Co-ops are busy enough running their own businesses, they want others to take care of education and development”; “Co-ops don't have the time or money for dues and another meeting”; “The differences in ages and industries of the co-ops make responding to larger questions untenable”; “Did you know they tried that 25 years ago?” ”And again 15 years ago?”; “Provision of technical assistance is best left to the experts. How could you be better than they are?”

This critical feedback was useful as it articulated challenges that did in fact exist and provided a format to respond. Was it true co-operators were too busy? Or was it necessary to re-organize models of development so that co-ops could channel their interest and constructively share their expertise? Was it a lack of time to dedicate to issues larger than one business at a time? One could also say a lack of a co-op directed venue for members work together for long term strategy prevented possibilities of cross co-op collaboration. Were the differences among worker co-ops obstructing pooling resources? As in any movement the question guided us towards having the task of finding shared advantages to work from. Did we consider co-operators experts? This question deserves more time. In short a response is: Co-operators run their own businesses, why can't they run their own support and development? We weren’t sure our movement is dreaming big enough.

Reviewing this document after some of its goals have been achieved it is clear how we are benefitting from its contributions. In re-publishing we wanted to provide an updated list of activities. So many ideas were first described here: Staff roles and responsibilities, respecting the tradition of collective management of many VAWC Member Co-ops, legislative engagement, inter-co-operative purchasing, a VAWC Owners’ Manual and more. In most basic terms, the report outlined the opportunity for worker co-ops to make their presence known through shared marketing, including:

In 2009 VAWC launched our ‘Working for a Co-operative Economy’ marketing campaign, with rotating ads featuring all VAWC Member Co-ops under one recognizable slogan emphasizing their shared co-op identity. The campaign focuses on advertising in area food co-op newsletters and other receptive outlets, directly reaching over 11,000 co-op members in our region.

The report also pointed to the opportunity of building on some of the unique characteristics of local institutions of higher learning to increase the attention paid to co-operative enterprise in the curriculum:

Engaging Educational Institutions:

Offer support and promotion to existing programs providing content on the co-operative movement and enterprise development

Proposing or providing content for institutions in the region

With support from Michael Johnson of Ganas Community and the NFCA, we worked with the Economics Department at the University of Massachusetts, Amherst, to co-found the Co-operative Enterprise Collaborative. The Economics Department now offers a Certificate in Co-operative Enterprise, including an upper level class and an internship program. In our fourth year offering this certificate over 200 students in 6 classes have learned the major dialog points and shared advantages of co-operatives. The certificate is fortunate to find support in a unique department founded on collective and radical principles and the presence of several student run businesses that operate as if they were worker co-ops. In 2013, Crowell taught a senior seminar on the co-operative movement as part of the University’s Social Thought & Political Economy (STPEC) program, and will teach a 100-level “Introduction to Co-operative Movement” in 2014. Co-operators and the support staff have visited several other classes within the university to augment existing curriculum through related co-operative history, identity and case studies.

A central conclusion of Crowell’s report is that successful co-operative complexes are characterized by economic development that is guided and largely funded by co-ops themselves. Just as a core strength of the co-op business model is the development and articulation of member ownership, governance and accountability, development is more efficient, effective and sustainable when embedded in the movement itself, as opposed to focused on the priorities of the state or non-profit entities:

Engagement in Co-operative Development:

Key to the success of Mondragón and Italian co-ops is direct, strategic engagement in co-operative development, and the dedication of financial resources to these purposes.

Since VAWC formalized its co-op led development model in 2009, it has doubled in membership. In the space of two years, VAWC has supported the conversion of 4 existing businesses into worker co-ops as well as a start-up worker co-op. This has brought our system up to 11 Member Co-ops with 65+ worker/members, 10 apprentices, $7.2 million in annual revenue and $35,000 in annual charitable donations. This is an achievement for co-ops running an organization of our scale and speaks to the impact of our model. Recently our work was recognized by the Eastern Conference for Workplace Democracy when VAWC received ‘Co-operative Advocacy and Development Award’ for 2013.

In addition to integrated development, self-financing has been key to the success of co-operative complexes like Mondragón and northern Italy, and the report recommended that VAWC consider establishing a similar funding mechanism:

External Financing Mechanisms:

VAWC could consider (using surplus from member co-ops from Italy's Emilia Romagna as a source for) policy for members that would contribute to a fund that could either operate independently or, rather than duplicating effort, in collaboration with an existing fund.

In January of 2013, the Alliance established the “VAWC Interco-operative Development Fund.” An asset held and directed by VAWC, the VIDF is housed in long-time partner the Co-operative Fund of New England. Through serving as a social investment in our region’s co-operative community it is ready to be implemented as a micro loan or as an additional collateral pool for larger loans. From an article in the Co-operative Business Journal:

The fund is made up of yearly contributions of a percentage of surplus from VAWC's Member Co-operatives, a financing mechanism learned from a system of co-ops in the Emilia Romagna region of Italy. In a law written by co-ops themselves, every co-op is required to contribute 3% of surplus to a development fund of their choice and the result is one of the largest and most integrated co-ops complexes in the world. VAWC Member Co-ops contribute 5%.

Finally, it is important to note that cross sector collaboration is a cornerstone of the success of co-operative complexes around the world and the report emphasized the potential of similar activities in the Valley:

An Emphasis on Inter-co-operation:

The vision of the co-operative identity as a coherent economic alternative provides the core rationale for interco-operation, both within the worker co-operative sector and across sectors. If one believes in the core principles and values of co-operation, and ascribes certain benefits to the model, one can easily understand the role of co-operation among co-operatives as having both ethical and pragmatic characteristics.

From its beginnings, VAWC was supported by the United States Federation of Worker Co-operatives (USFWC) and benefited from the experience of the Network of Bay Area Worker Co-operatives. The parallel development of the NFCA, which includes 35 food co-ops and start-up initiatives across New England, has also offered opportunities for dialog and collaboration in a regional level that did not exist before. Both of our associations work closely with partners including the Cooperative Fund of New England, and were co-founders along with Franklin Community Co-op, NFCA and the UMASS Five College Federal Credit Union of the Valley Co-operative Business Association (VCBA). This organization, incorporated as a second-level co-op of co-ops, has led a new wave of similar efforts across the country.

As shown in other regions of the world, cross sector collaboration is key to expanding the impact and potential of co-operative enterprise. The United Nations declaration of 2012 as “The International Year of Co-operatives” offered an opportunity to deepen partnerships within and across sectors, and look forward to opportunities to contribute to the International Co-operative Alliance’s vision for a “Co-operative Decade.”

In the context of a continuing global recession there is a hunger for economic alternatives which represent democracy, community and sustainability. This is what co-ops do best. We believe that the momentum of the co-operative movement in our region is the result of learning from the experience and success of others, applying these lessons to our own context, and then collaborating in a deliberate and strategic manner to carry our work forward. We hope to share our experience with co-op led economic development and support the efforts of others to advance similar work in their communities. We welcome your feedback on this report and look forward to collaborating with likeminded organizations as we continue to articulate our vision for an expansive co-operative economy rooted in our history, values and principles.

Editor's Note: The full text of the report can be found via this link.

About the author:

Adam Trott is Staff Developer at the Valley Alliance of Worker Co-ops.